Agriculture Law: martindale

8/14/2019 Agriculture Law: martindale

1/35

During the period January 14, 2002, through February 26, 2003, Garden Fresh1

Produce, Inc., purchased, received, and accepted in interstate commerce, from five

produce sellers, 109 lots of perishable agricultural commodities, but failed to make full

payment promptly of the agreed purchase prices, in the total amount of $379,923.25, in

violation of section 2(4) of the PACA (7 U.S.C. 499b(4)). In re Garden Fresh Produce,

Inc., 63 Agric. Dec. 1032 (2004).

UNITED STATES DEPARTMENT OF AGRICULTURE

BEFORE THE SECRETARY OF AGRICULTURE

In re: ) PACA-APP Docket No. 04-0010

Edward S. Martindale, )

)

Petitioner ) Decision and Order

PROCEDURAL HISTORY

On May 10, 2004, James R. Frazier, Chief, PACA Branch, Fruit and Vegetable

Programs, Agricultural Marketing Service, United States Department of Agriculture

[hereinafter Respondent], issued a determination that Edward S. Martindale [hereinafter

Petitioner] was responsibly connected with Garden Fresh Produce, Inc., during the period

January 2002 through February 2003, when Garden Fresh Produce, Inc., violated the

PACA. On June 14, 2004, Petitioner filed a Petition for Review pursuant to the1

Perishable Agricultural Commodities Act, 1930, as amended (7 U.S.C. 499a-499s)

[hereinafter the PACA]; and the Rules of Practice Governing Formal Adjudicatory

Proceedings Instituted by the Secretary Under Various Statutes (7 C.F.R. 1.130-.151)


2/35

2

[hereinafter the Rules of Practice] seeking reversal of Respondents May 10, 2004,

determination that Petitioner was responsibly connected with Garden Fresh Produce, Inc.

On March 2, 2005, Chief Administrative Law Judge Marc R. Hillson [hereinafter

the Chief ALJ] presided over a hearing in San Jose, California. P. Sterling Kerr, Kerr &

Associates, Las Vegas, Nevada, represented Petitioner. Charles L. Kendall, Office of the

General Counsel, United States Department of Agriculture, represented Respondent.

On January 27, 2006, after the parties filed post-hearing briefs, the Chief ALJ

issued a Decision [hereinafter Initial Decision] in which the Chief ALJ concluded

Petitioner was responsibly connected with Garden Fresh Produce, Inc., when Garden

Fresh Produce, Inc., violated the PACA (Initial Decision at 1, 14).

On March 8, 2006, Petitioner appealed to the Judicial Officer. On March 28,

2006, Respondent filed a response to Petitioners appeal petition. On April 28, 2006, the

Hearing Clerk transmitted the record to the Judicial Officer for consideration and

decision.

Based upon a careful consideration of the record, I agree with the Chief ALJs

conclusion that Petitioner was responsibly connected with Garden Fresh Produce, Inc.,

when Garden Fresh Produce, Inc., violated the PACA. Respondents exhibits are

designated by RX. Transcript references are designated by Tr.


3/35

3

APPLICABLE STATUTORY PROVISIONS

7 U.S.C.:

TITLE 7AGRICULTURE

. . . .

CHAPTER 20APERISHABLE AGRICULTURAL COMMODITIES

. . . .

499a. Short title and definitions

. . . .

(b) Definitions

For purposes of this chapter:

. . . .

(9) The term responsibly connected means affiliated or connected

with a commission merchant, dealer, or broker as (A) partner in a

partnership, or (B) officer, director, or holder of more than 10 per centum of

the outstanding stock of a corporation or association. A person shall not bedeemed to be responsibly connected if the person demonstrates by a

preponderance of the evidence that the person was not actively involved in

the activities resulting in a violation of this chapter and that the person

either was only nominally a partner, officer, director, or shareholder of a

violating licensee or entity subject to license or was not an owner of a

violating licensee or entity subject to license which was the alter ego of its

owners.

. . . .

499b. Unfair conduct

It shall be unlawful in or in connection with any transaction in

interstate or foreign commerce:

. . . .

(4) For any commission merchant, dealer, or broker to make, for

a fraudulent purpose, any false or misleading statement in connection with

any transaction involving any perishable agricultural commodity which is


4/35

4

received in interstate or foreign commerce by such commission merchant,

or bought or sold, or contracted to be bought, sold, or consigned, in such

commerce by such dealer, or the purchase or sale of which in such

commerce is negotiated by such broker; or to fail or refuse truly andcorrectly to account and make full payment promptly in respect of any

transaction in any such commodity to the person with whom such

transaction is had; or to fail, without reasonable cause, to perform any

specification or duty, express or implied, arising out of any undertaking in

connection with any such transaction; or to fail to maintain the trust as

required under section 499e(c) of this title. However, this paragraph shall

not be considered to make the good faith offer, solicitation, payment, or

receipt of collateral fees and expenses, in and of itself, unlawful under this

chapter.

. . . .

499d. Issuance of license

(a) Authority to do business; termination; renewal

Whenever an applicant has paid the prescribed fee the Secretary,

except as provided elsewhere in this chapter, shall issue to such applicant a

license, which shall entitle the licensee to do business as a commission

merchant and/or dealer and/or broker unless and until it is suspended or

revoked by the Secretary in accordance with the provisions of this chapter,or is automatically suspended under section 499g(d) of this title, but said

license shall automatically terminate on the anniversary date of the license

at the end of the annual or multiyear period covered by the license fee

unless the licensee submits the required renewal application and pays the

applicable renewal fee (if such fee is required)[.]

(b) Refusal of license; grounds

The Secretary shall refuse to issue a license to an applicant if he

finds that the applicant, or any person responsibly connected with the

applicant, is prohibited from employment with a licensee under section

499h(b) of this title or is a person who, or is or was responsibly connected

with a person who

(A) has had his license revoked under the provisions of

section 499h of this title within two years prior to the date of the

application or whose license is currently under suspension; [or]


5/35

5

(B) within two years prior to the date of application has been

found after notice and opportunity for hearing to have committed any

flagrant or repeated violation of section 499b of this title, but this

provision shall not apply to any case in which the license of theperson found to have committed such violation was suspended and

the suspension period has expired or is not in effect[.]

. . . .

(c) Issuance of license upon furnishing bond; issuance after three

years without bond; effect of termination of bond; increase or

decrease in amount; payment of increase

An applicant ineligible for a license by reason of the provisions of

subsection (b) of this section may, upon the expiration of the two-yearperiod applicable to him, be issued a license by the Secretary if such

applicant furnishes a surety bond in the form and amount satisfactory to the

Secretary as assurance that his business will be conducted in accordance

with this chapter and that he will pay all reparation orders which may be

issued against him in connection with transactions occurring within four

years following the issuance of the license, subject to his right of appeal

under section 499g(c) of this title. In the event such applicant does not

furnish such a surety bond, the Secretary shall not issue a license to him

until three years have elapsed after the date of the applicable order of the

Secretary or decision of the court on appeal. If the surety bond so furnishedis terminated for any reason without the approval of the Secretary the

license shall be automatically canceled as of the date of such termination

and no new license shall be issued to such person during the four-year

period without a new surety bond covering the remainder of such period.

The Secretary, based on changes in the nature and volume of business

conducted by a bonded licensee, may require an increase or authorize a

reduction in the amount of the bond. A bonded licensee who is notified by

the Secretary to provide a bond in an increased amount shall do so within a

reasonable time to be specified by the Secretary, and upon failure of the

licensee to provide such bond his license shall be automatically suspended

until such bond is provided. The Secretary may not issue a license to an

applicant under this subsection if the applicant or any person responsibly

connected with the applicant is prohibited from employment with a licensee

under section 499h(b) of this title.


6/35

6

499h. Grounds for suspension or revocation of license

(a) Authority of Secretary

Whenever (1) the Secretary determines, as provided in section 499f

of this title, that any commission merchant, dealer, or broker has violated

any of the provisions of section 499b of this title, or (2) any commission

merchant, dealer, or broker has been found guilty in a Federal court of

having violated section 499n(b) of this title, the Secretary may publish the

facts and circumstances of such violation and/or, by order, suspend the

license of such offender for a period not to exceed ninety days, except that,

if the violation is flagrant or repeated, the Secretary may, by order, revoke

the license of the offender.

(b) Unlawful employment of certain persons; restrictions; bond

assuring compliance; approval of employment without bond;

change in amount of bond; payment of increased amount;

penalties

Except with the approval of the Secretary, no licensee shall employ

any person, or any person who is or has been responsibly connected with

any person

(1) whose license has been revoked or is currentlysuspended by order of the Secretary;

(2) who has been found after notice and opportunity

for hearing to have committed any flagrant or repeated

violation of section 499b of this title, but this provision shall

not apply to any case in which the license of the person found

to have committed such violation was suspended and the

suspension period has expired or is not in effect; or

(3) against whom there is an unpaid reparation award

issued within two years, subject to his right of appeal under

section 499g(c) of this title.

The Secretary may approve such employment at any time following

nonpayment of a reparation award, or after one year following the

revocation or finding of flagrant or repeated violation of section 499b of

this title, if the licensee furnishes and maintains a surety bond in form and

amount satisfactory to the Secretary as assurance that such licensees

business will be conducted in accordance with this chapter and that the


7/35

7

7 U.S.C. 499a(b)(9).2

licensee will pay all reparation awards, subject to its right of appeal under

section 499g(c) of this title, which may be issued against it in connection

with transactions occurring within four years following the approval. The

Secretary may approve employment without a surety bond after theexpiration of two years from the effective date of the applicable disciplinary

order. The Secretary, based on changes in the nature and volume of

business conducted by the licensee, may require an increase or authorize a

reduction in the amount of the bond. A licensee who is notified by the

Secretary to provide a bond in an increased amount shall do so within a

reasonable time to be specified by the Secretary, and if the licensee fails to

do so the approval of employment shall automatically terminate. The

Secretary may, after thirty days[] notice and an opportunity for a hearing,

suspend or revoke the license of any licensee who, after the date given in

such notice, continues to employ any person in violation of this section.The Secretary may extend the period of employment sanction as to a

responsibly connected person for an additional one-year period upon the

determination that the person has been unlawfully employed as provided in

this subsection.

7 U.S.C. 499a(b)(9), 499b(4), 499d(a), (b)(A)-(B), (c), 499h(a)-(b).

DECISION

Preliminary Statement

The term responsibly connectedmeans affiliated or connected with a commission

merchant, dealer, or broker as a partner in a partnership or an officer, a director, or a

holder of more than 10 percent of the outstanding stock of a corporation or association.2

The record establishes Petitioner was an officer, a director, and a holder of more than

10 percent of the outstanding stock of Garden Fresh Produce, Inc., during the period

January 14, 2002, through February 26, 2003, when Garden Fresh Produce, Inc., violated

section 2(4) of the PACA (7 U.S.C. 499b(4)). The burden is on Petitioner to


8/35

8

demonstrate by a preponderance of the evidence that he was not responsibly connected

with Garden Fresh Produce, Inc., despite being an officer, a director, and a holder of more

than 10 percent of the outstanding stock of Garden Fresh Produce, Inc.

Section 1(b)(9) of the PACA (7 U.S.C. 499a(b)(9)) provides a two-prong test

which a petitioner must meet in order to demonstrate that he or she was not responsibly

connected. First, a petitioner must demonstrate by a preponderance of the evidence that

he or she was not actively involved in the activities resulting in a violation of the PACA.

If a petitioner satisfies the first prong, then for the second prong, the petitioner must

demonstrate by a preponderance of the evidence one of two alternatives: (1) the

petitioner was only nominally a partner, an officer, a director, or a shareholder of the

violating PACA licensee or entity subject to a PACA license; or (2) the petitioner was not

an owner of the violating PACA licensee or entity subject to a PACA license, which was

the alter ego of its owners.

Petitioner failed to carry his burden of proof that he was not actively involved in

the activities resulting in Garden Fresh Produce, Inc.s violations of the PACA. Petitioner

also failed to carry his burden of proof that he was only nominally an officer, a director,

and a holder of more than 10 percent of the outstanding stock of Garden Fresh Produce,

Inc. Moreover, as Petitioner was an owner of Garden Fresh Produce, Inc., the defense

that he was not an owner of Garden Fresh Produce, Inc., which was the alter ego of its


9/35

9

In re James E. Thames, Jr. (Decision as to James E. Thames, Jr.), __ Agric.3

Dec. ___, slip op. at 11 (Jan. 24, 2006) (holding the petitioner, who was an owner of the

violating PACA licensee could not raise the defense that he was not an owner of thelicensee, which was the alter ego of its owners), appeal docketed, No. 06-11609-CC (11th

Cir. Mar. 13, 2006);In re Benjamin Sudano, 63 Agric. Dec. 388, 411 (2004) (holding the

petitioners, who were owners of the violating PACA licensee could not raise the defense

that they were not owners of the licensee, which was the alter ego of its owners), affd per

curiam, 131 F. Appx 404 (4th Cir. 2005);In re Anthony L. Thomas, 59 Agric. Dec. 367,

390 (2000) (stating a petitioner must prove not only that the violating PACA licensee was

the alter ego of an owner, but also, the petitioner was not an owner of the violating

licensee; therefore, the petitioner, who held 49 percent of the outstanding stock of the

violating PACA licensee, cannot avail himself of the defense that the violating PACA

licensee was the alter ego of an owner), affd, No. 00-1157 (D.C. Cir. Jan. 30, 2001);Inre Steven J. Rodgers, 56 Agric. Dec. 1919, 1956 (1997) (stating a petitioner must prove

not only that the violating PACA licensee was the alter ego of an owner, but also, the

petitioner was not an owner of the violating licensee; therefore, the petitioner, who held

33.3 percent of the outstanding stock of the violating PACA licensee, cannot avail

himself of the defense that the violating PACA licensee was the alter ego of an owner),

affd per curiam, 172 F.3d 920, 1998 WL 794851 (D.C. Cir. 1998) (Table), printed in

57 Agric. Dec. 1464 (1998).

owners, is not available to Petitioner. As Petitioner has failed to carry his burden of3

proof regarding the first prong and second prong of the two-prong test, I conclude

Petitioner was responsibly connected with Garden Fresh Produce, Inc., when Garden

Fresh Produce, Inc., violated section 2(4) of the PACA (7 U.S.C. 499b(4)).

Accordingly, Petitioner is subject to the licensing restrictions under section 4(b) of the

PACA and the employment restrictions under section 8(b) of the PACA (7 U.S.C.

499d(b), 499h(b)).


10/35

10

Petitioners legal name is Edward Shane Martindale but he is generally known as4

Shane Martindale (Tr. 34).

Facts

Petitioner Edward Shane Martindale has worked in the produce business for4

approximately 15 years. Petitioner began working at Martindale Distributing, a business

run by his father in Salinas, California. When Petitioner began working at Martindale

Distributing, his stepbrother, Donald R. Beucke, and his older brother, Wayne

Martindale, were already involved in the business. Petitioner started in Martindale

Distributing as a produce inspector and on grounds buyer. When Petitioners father

retired from Martindale Distributing in 1999, Petitioner, along with his stepbrother and

brother, purchased the company, with each of them owning one-third of the company.

Since approximately May 2003, when his brother and stepbrother resigned from

Martindale Distributing, Petitioner has been the 100 percent owner of Martindale

Distributing. (Tr. 36-39, 41-42.)

In late 1999 or early 2000, Wayne Martindale, who, with his stepbrother Donald

Beucke, had already started Bayside Produce, a produce company with a warehouse in

San Diego, started talking about wanting to open another company in Las Vegas.

(Tr. 42.) Petitioner joined his brother and stepbrother, along with several others, and

formed Garden Fresh Produce, Inc. Petitioner was a 20 percent shareholder of the new

company and was listed as a director and the secretary. Petitioner was issued a stock

certificate indicating that he owned 1,000 shares of stock in Garden Fresh Produce, Inc.


11/35

11

(RX 10 at 4), although Petitioner stated he had never seen the stock certificate before the

institution of the instant proceeding. Petitioner signed the original PACA license

application and the check in payment of the PACA licensing fee. Petitioner submitted his

resignation and reassigned his stock on April 4, 2003. By letter dated April 28, 2003,

Petitioner notified the United States Department of Agriculture, Agricultural Marketing

Service, Fruit and Vegetable Programs, PACA Branch, that he was no longer connected

with Garden Fresh Produce, Inc., and asked that his name be removed from Garden Fresh

Produce, Inc.s PACA license (RX 1 at 16).

Petitioner stated he originally decided to join Garden Fresh Produce , Inc., because

he was good with bills and money management (Tr. 85). During the early days of Garden

Fresh Produce, Inc.s operations, Petitioner, working from Martindale Distributings

Salinas, California, office, handled much of Garden Fresh Produce, Inc.s paperwork,

even receiving a salary for handling Garden Fresh Produce, Inc.s payables. Petitioner

classified his principal duties with Garden Fresh Produce, Inc., as that of an accounts

payable manager, but after Wayne Martindale moved Garden Fresh Produce, Inc.s

accounts payable operations to Las Vegas, Nevada, at the end of 2001, Petitioner issued

only a small number of checks for Garden Fresh Produce, Inc. Petitioner stated he

relinquished his role because of differences of opinion with his brothers, problems arising

from the use of non-matching computer systems, and problems with coordination of

purchase orders and bills. Petitioner told the other shareholders that he would no longer

handle the payables for Garden Fresh Produce, Inc. All the Garden Fresh Produce, Inc.,


12/35

12

invoices that he had in his possession and had not been paid were taken by Wayne

Martindale to Las Vegas, Nevada, in December 2001. (Tr. 48-50.)

Petitioner purchased produce on behalf of Garden Fresh Produce, Inc., in the first

year it did business, but did not recall purchasing produce after his brother took Garden

Fresh Produce, Inc.s payables to Las Vegas at the end of 2001 (Tr. 51). However, Joe

Quijada, a produce seller, testified that, while he was not 100 percent certain of the year

of the transactions, he dealt with Petitioner when selling produce to Garden Fresh

Produce, Inc., in 2002 (Tr. 17-18). Petitioner issued checks after 2001 when he was

directed by his brother and stepbrother to make payment to certain vendors that were in

Salinas. (Tr. 52, 95.) The record does not contain evidence that Petitioner was directly

involved in any of the transactions that were the subject ofIn re Garden Fresh Produce,

Inc., 63 Agric. Dec. 1032 (2004).

Petitioner testified that, after December 2001, he did not actively monitor Garden

Fresh Produce, Inc., on a regular basis, even though he was still a shareholder, an officer,

and a director (Tr. 52). Petitioner took calls for Garden Fresh Produce, Inc., at his

Salinas, California, office and became aware in 2002 that there were complaints about the

way Garden Fresh Produce, Inc., handled accounts payable. Petitioner referred callers to

Wayne Martindale to attempt to resolve Garden Fresh Produce, Inc.s failures to pay

(Tr. 52-53). Other than referring callers to his brother, Petitioner only could recall

warning one company, Sun America Produce, that he had concerns about Garden Fresh

Produce, Inc.s failures to pay its bills promptly (Tr. 81). Even though Petitioner knew


13/35

13

Garden Fresh Produce, Inc., had financial problems, he did not ask to see a financial

statement or bank statements, relying on statements from Wayne Martindale and Donald

Beucke that things were getting better. (Tr. 99.)

Before Petitioner resigned from Garden Fresh Produce, Inc., by letter dated

April 4, 2003, Petitioner signed documents accepting the resignation of two of Garden

Fresh Produce, Inc.s directors, David N. Wiles and Bruce Martindale (RX 1 at 13, RX 9,

RX 11). Joe Quijada and Steven Wood (the latter called by Respondent) each testified

that Wayne Martindale was the primary contact when dealing with Garden Fresh

Produce, Inc. (Tr. 25, 28). Mr. Quijada testified that he never had any slow-pay problems

with Martindale Distributing and characterized Petitioner as an upstanding individual.

(Tr. 22.)

Evert Gonzalez, a senior marketing specialist for the PACA Branch, testified that

his investigation was initiated after the PACA Branch received reparation complaints

instituted by produce sellers against Garden Fresh Produce, Inc. (Tr. 108-09).

Mr. Gonzalez described his investigation, which primarily involved visiting Garden Fresh

Produce, Inc.s Las Vegas, Nevada, office. No one was at the premises when he first

arrived, but he eventually received access and requested a variety of records (Tr. 110-11).

Wayne Martindale indicated to Mr. Gonzalez that all the principals in Garden Fresh

Produce, Inc., including the Petitioner, had equal authority and could sign checks and pay

payables (Tr. 112).


14/35

14

Phyllis Hall, a senior marketing specialist for the PACA Branch, reviewed the file

and identified the documents (RX 1-RX 10) contained in the responsibly connected file

maintained by the PACA Branch (Tr. 117-40).

Findings of Fact

1. Petitioner was part of a group of individuals who organized Garden Fresh

Produce, Inc., in April 2000. On April 28, 2000, Petitioner signed the minutes of the

organizational meeting of Garden Fresh Produce, Inc.s board of directors. Petitioner was

a 20 percent shareholder, a director, and the secretary of Garden Fresh Produce, Inc.

(Tr. 42; RX 8.)

2. Petitioner signed Garden Fresh Produce, Inc.s application for a PACA

license and was authorized to sign checks on behalf of Garden Fresh Produce, Inc. As the

money manager of Garden Fresh Produce, Inc., Petitioner handled a significant portion of

the payables in 2001. Even after the payables were transferred to Las Vegas, Nevada, in

late 2001, Petitioner handled occasional payments as directed by Wayne Martindale. In

2002, Petitioner purchased some produce for Garden Fresh Produce, Inc. (Tr. 17-18,

48-50, 91-96.)

3. On October 8, 2002, Petitioner signed the board of directors resolution

accepting the resignation of director David N. Wiles. On October 8, 2002, Petitioner

signed the waiver of notice and action by written consent of the shareholders of Garden

Fresh Produce, Inc., accepting the resignation of director David N. Wiles. (RX 9,

RX 11.)


15/35

15

4. On March 3, 2003, Petitioner signed the board of directors resolution

accepting the resignation of director Bruce Martindale (RX 1 at 13).

5. Petitioner resigned as a director of Garden Fresh Produce, Inc., on April 4,

2003. Petitioner also assigned his stock in the company back to Garden Fresh Produce,

Inc., on April 4, 2003. (RX 1 at 18, 20.)

6. During the period January 14, 2002, through February 26, 2003, Garden

Fresh Produce, Inc., failed to make full payment promptly of the agreed purchase prices

to five produce sellers for 109 lots of perishable agricultural commodities, in the total

amount of $379,923.25 (RX 12).

7. During the period January 14, 2002, through February 26, 2003, Petitioner

was a director, the secretary, and 20 percent stockholder of Garden Fresh Produce, Inc.

(RX 1, RX 7, RX 8, RX 10 at 4; Tr. 134-36). The record does not contain evidence that

Petitioner was directly involved in any of the transactions described in Finding of Fact

number 6.

8. At all times material to this proceeding, Petitioner had the same authority as

all other principals in Garden Fresh Produce, Inc. (Tr. 112).

9. At all times material to this proceeding, Petitioner was authorized to

negotiate contracts, leases, and other arrangements for and on behalf of Garden Fresh

Produce, Inc., and, with the other officers of Garden Fresh Produce, Inc., had

responsibility for the activities of the corporation (RX 8 at 4, 5).


16/35

16

10. Petitioner notified the United States Department of Agriculture,

Agricultural Marketing Service, Fruit and Vegetable Programs, PACA Branch, by letter

dated April 28, 2003, that he was no longer connected with Garden Fresh Produce, Inc.

In that letter, Petitioner requested that the United States Department of Agriculture

remove his name from Garden Fresh Produce, Inc.s PACA license. (RX 1 at 16.)

11. Petitioner has extensive experience in the produce industry. At the time of

the hearing, Petitioner had worked in the produce industry for over 15 years; Petitioner

had held a number of positions, including sole ownership of Martindale Distributing;

Petitioner was particularly knowledgeable in the areas of money management and bill

paying in the produce industry; and Petitioner was thoroughly knowledgeable in produce

industry operations. (Tr. 35-36, 83-85.)

12. With respect to his employment at Martindale Distributing, Petitioner

enjoys a good reputation in the produce business, including timely payment in produce

transactions (Tr. 22).

13. Petitioner received compensation for his services in the first year of Garden

Fresh Produce, Inc.s operations (Tr. 45).

14. At all times material to this proceeding, Petitioner knew that Garden Fresh

Produce, Inc., was not making full payment promptly for produce. In 2002, a number of

Garden Fresh Produce, Inc.s produce sellers, who were not being paid promptly by

Garden Fresh Produce, Inc., contacted Petitioner in order to obtain payment for produce.

Petitioner only warned one of these produce sellers, Sun Valley Produce, that Petitioner


17/35

17

In re Garden Fresh Produce, Inc., 63 Agric. Dec. 1032 (2004).5

had concerns about the manner in which Garden Fresh Produce, Inc., was paying its bills.

(Tr. 52-53, 81.)

Discussion

I. Introduction

Responsibly connected liability is triggered when a company has its PACA license

revoked or suspended or when the company has been found to have committed flagrant

and repeated violations of section 2 of the PACA (7 U.S.C. 499b). During the period

January 14, 2002, through February 26, 2003, Garden Fresh Produce, Inc., committed

willful, repeated, and flagrant violations of section 2(4) of the PACA (7 U.S.C.

499b(4)) by failing to make full payment promptly of the agreed purchase prices to five

produce sellers for 109 lots of perishable agricultural commodities, in the total amount of

$379,923.25. Thus, an individual who was responsibly connected with Garden Fresh5

Produce, Inc., when Garden Fresh Produce, Inc., violated the PACA is subject to the

licensing restrictions under section 4(b) of the PACA and the employment restrictions

under section 8(b) of the PACA (7 U.S.C. 499d(b), 499h(b)).

Petitioner was an officer, a director, and a holder of more than 10 percent of the

outstanding stock of Garden Fresh Produce, Inc., during the period January 14, 2002,

through February 26, 2003, when Garden Fresh Produce, Inc., violated section 2(4) of the

PACA (7 U.S.C. 499b(4)). The burden is on Petitioner to demonstrate by a


18/35

18

See note 3.6

preponderance of the evidence that he was not responsibly connected with Garden Fresh

Produce, Inc., despite being an officer, a director, and a holder of more than 10 percent of

the outstanding stock of Garden Fresh Produce, Inc.

Petitioner failed to carry his burden of proof that he was not actively involved in

the activities resulting in Garden Fresh Produce, Inc.s violations of the PACA. Petitioner

also failed to carry his burden of proof that he was only nominally an officer, a director,

and a holder of more than 10 percent of the outstanding stock of Garden Fresh Produce,

Inc. Moreover, as Petitioner was an owner of Garden Fresh Produce, Inc., the defense

that he was not an owner of Garden Fresh Produce, Inc., which was the alter ego of its

owners, is not available to Petitioner. As Petitioner has failed to carry his burden of6

proof regarding the first prong and second prong of the two-prong responsibly connected

test, I conclude Petitioner was responsibly connected with Garden Fresh Produce, Inc., at

the time Garden Fresh Produce, Inc., violated section 2(4) of the PACA (7 U.S.C.

499b(4)).

II. Petitioner Was Actively Involved In Activities

Resulting In PACA Violations

The United States Department of Agricultures standard for determining whether a

petitioner is actively involved in the activities resulting in a violation of the PACA was

first set forth in In re Michael Norinsberg(Decision and Order on Remand), 58 Agric.

Dec. 604, 610-11 (1999), as follows:


19/35

19

The standard is as follows: A petitioner who participates in activities

resulting in a violation of the PACA is actively involved in those activities,

unless the petitioner demonstrates by a preponderance of the evidence that

his or her participation was limited to the performance of ministerialfunctions only. Thus, if a petitioner demonstrates by a preponderance of the

evidence that he or she did not exercise judgment, discretion, or control

with respect to the activities that resulted in a violation of the PACA, the

petitioner would not be found to have been actively involved in the

activities that resulted in a violation of the PACA and would meet the first

prong of the responsibly connected test.

Petitioner was actively involved in the activities resulting in the PACA violations

committed by Garden Fresh Produce, Inc. Although Petitioner did not directly participate

in the specific transactions resulting in Garden Fresh Produce, Inc.s PACA violations,

Petitioner issued checks in 2002, usually at the direction of Wayne Martindale, at a time

when Petitioner knew Garden Fresh Produce, Inc., was not paying produce sellers

promptly (Tr. 52, 55). Also, Petitioner made some purchases for Garden Fresh Produce,

Inc., in 2002 (Tr. 17-18). By making payments at a time when he knew Garden Fresh

Produce, Inc., was not paying some of its produce sellers, Petitioner was in effect

choosing which debts to pay, even though it was ostensibly under the direction of

Wayne Martindale or Donald Beucke. As a co-owner, an officer, and a director,

Petitioner cannot avoid his responsibilities under the PACA by characterizing himself as

an individual powerless to disobey these directives. Petitioners executing these checks at

a time when he knew Garden Fresh Produce, Inc., was having financial problems is just

the kind of conduct referred to inIn re Lawrence D. Salins, 57 Agric. Dec. 1474 (1998),

when I held that check writing and choosing which debts to pay can cause an individual


20/35

20

Bell v. Department of Agric., 39 F.3d 1199, 1201 (D.C. Cir. 1994);Minotto v.7

United States Dept of Agric., 711 F.2d 406, 408-09 (D.C. Cir. 1983); Quinn v. Butz,

510 F.2d 743, 756 n.84 (D.C. Cir. 1975).

to be actively involved in failure to pay promptly for produce. Id. at 1488-89.

Moreover, continuing to make purchases during the period when a PACA licensee is

violating the prompt payment provision of the PACA can cause an individual to be

actively involved in the failure of a PACA licensee to make full payment promptly in

accordance with the PACA.

III. Petitioner Was Not Merely A Nominal Officer,

Director, Or Shareholder

Petitioner did not meet his burden of showing, by a preponderance of the evidence,

that he was only a nominal 20 percent shareholder, director, and secretary. In order for a

petitioner to show that he or she was only nominally an officer, a director, and a

stockholder, the petitioner must show by a preponderance of the evidence that he or she

did not have an actual, significant nexus with the violating company during the violation

period. Under the actual, significant nexus standard, responsibilities are placed upon

corporate officers, directors, and stockholders, even though they may not actually have

been actively involved in the activities resulting in violations of the PACA, because their

status with the company requires that they knew, or should have known, about the

violations being committed and they failed to counteract or obviate the fault of others.7

The record establishes Petitioner had an actual, significant nexus with Garden Fresh

Produce, Inc., during the violation period.


21/35

21

Siegel v. Lyng, 851 F.2d 412, 417 (D.C. Cir. 1988) (stating this court has held,8

most clearly inMartino, that approximately 20 percent stock ownership would suffice to

make a person accountable for not controlling delinquent management); Veg-Mix, Inc. v.

United States Dept of Agric., 832 F.2d 601, 611 (D.C. Cir. 1987) (stating with approval,

inMartino, we found ownership of 22.2 percent of the violating companys stock was

enough support for a finding of responsible connection);Martino v. United States Dept

of Agric., 801 F.2d 1410, 1414 (D.C. Cir. 1986) (holding ownership of 22.2 percent of thestock of a company formed a sufficient nexus to establish the petitioners responsible

connection to the company);In re Joseph T. Kocot, 57 Agric. Dec. 1517, 1544-45 (1998)

(stating the petitioners ownership of a substantial percentage of the outstanding stock of

the violating company alone is very strong evidence that the petitioner was not a nominal

shareholder);In re Steven J. Rodgers , 56 Agric. Dec. 1919, 1956 (1997) (stating the

petitioners ownership of 33.3 percent of the outstanding stock of the violating entity

(continued...)

Petitioner was a co-founder of Garden Fresh Produce, Inc., and was actively

involved in managing the money and paying the bills of the company at its outset.

Petitioners relationship to Garden Fresh Produce, Inc., is much different than an

individual who is listed as an owner because his or her spouse or parent put him or her on

corporate records and had no involvement in the corporation or experience in the produce

business. Rather, Petitioner is an experienced, savvy individual who has worked in the

produce business for at least 15 years, who has worked for years with some or all of the

principals in Garden Fresh Produce, Inc., and who is fully aware of the significance of

having a valid PACA license and the importance of complying with the prompt payment

provision of the PACA. Congress utilization of ownership of more than 10 percent of

the outstanding stock of a corporation as sufficient to trigger the presumption that the

owner was responsibly connected is a strong indication that a 20 percent owner does not

serve in a nominal capacity.8


22/35

22

(...continued)8

alone is very strong evidence that the petitioner was responsibly connected with the

violating entity), affd per curiam, 172 F.3d 920, 1998 WL 794851 (D.C. Cir. 1998)

(Table), printed in 57 Agric. Dec. 1464 (1998).

There is no evidence that Petitioner was other than a voluntary investor, who

undertook the responsibilities associated with being a director, the secretary, and a

co-owner in an attempt to establish a profitable business. Petitioner presumably would

have shared in the companys profits when there were some. Petitioner participated in a

number of corporate matters, including signing the PACA license application, signing

documents accepting the resignations of at least two other directors, and allowing himself

to be an authorized signatory on company checks. While for practical purposes it is

evident that Wayne Martindale ran Garden Fresh Produce, Inc., the record indicates only

one occasion when Petitioner exercised authority consistent with his positions as

20 percent owner, a director, and the secretary to counteract or obviate the fault of others.

Despite being contacted by numerous unpaid produce sellers, Petitioner, on only one

occasion, warned a produce seller, Sun America Produce, that he had concerns about the

way Garden Fresh Produce, Inc., was paying its bills (Tr. 81). That Petitioner chose not

to act does not establish that his role was nominal.

Petitioners Appeal Petition

Petitioner raises three issues in Petitioner Martindales Appeal Petition to

Department Judicial Officer and Supporting Brief [hereinafter Petitioners Appeal

Petition]. First, Petitioner contends the facts established in the record do not support the


23/35

23

See In re Michael Norinsberg(Decision and Order on Remand), 58 Agric. Dec.9

604, 610-11 (1999).

Chief ALJs conclusion that Petitioner was actively involved in activities resulting in

Garden Fresh Produce, Inc.s PACA violations (Petitioners Appeal Pet. at 3-9).

Petitioner states Judge Hillson, specifically found in his statement of facts in the

opinion that . . . He (Shane Martindale) was not directly involvedin any of the

transactions that were the subject of the Default Decision I entered against Garden Fresh.

Opinion p. 4, p. 8. In his legal conclusions, Judge Hillson then states that during the

period Garden Fresh was in violation of PACA that . . . Petitioner was actively involved

in the activities resulting in a violation of the PACA. Opinion p. 14 (Conclusion 4).

(Petitioners Appeal Pet. at 4-5.) I infer Petitioner contends the Chief ALJ could not

properly conclude Petitioner was actively involved in activities resulting in Garden Fresh

Produce, Inc.s violations of the PACA and also find Petitioner was not was not directly

involved in any of the transactions that were the subject ofIn re Garden Fresh Produce,

Inc., 63 Agric. Dec. 1032 (2004).

I disagree with Petitioners contention. The United States Department of

Agricultures standard for determining whether a petitioner is actively involved in the

activities resulting in a violation of the PACA does not require that the petitioner must

have been directly involved in the violative transactions. Thus, I do not find that, in9

order to conclude Petitioner was actively involved in the activities resulting in Garden

Fresh Produce, Inc.s violations of the PACA, I must first find Petitioner actually


24/35

24

purchased the produce for which Garden Fresh Produce, Inc., failed to make full payment

promptly. InIn re Lawrence D. Salins, 57 Agric. Dec. 1474, 1488-89 (1998), I found

erroneous an administrative law judges conclusion that the activities directly involving

the actual purchase of produce are the only activities which can result in a violation of the

PACA, as follows:

The ALJ is correct that purchasing produce when there are insufficient

funds leads directly to PACA payment violations, but I agree with

Respondent that the ALJ's conclusion erroneously assumes that the

activities directly involving the actual purchase of produce are the onlyactivities which can result in a violation of PACA. The ALJ gives no

authority for this assumption and I do not believe such a conclusion can be

supported.

On the contrary, I agree with Respondent that there are many

functions within the company, e.g., corporate finance, corporate decision

making, check writing, and choosing which debt-in-arrears to pay, which

can cause an individual to be actively involved in failure to pay promptly

for produce, even though the individual does not ever actually purchase

produce.

I concluded the petitioner, Lawrence D. Salins, was actively involved in the activities

resulting in Sol Salins, Inc.s violations of the PACA even though the petitioner did not

purchase any produce. In re Lawrence D. Salins, 57 Agric. Dec. 1454 (1998).

Petitioner also asserts that [i]t is quite apparent from Judge Hillsons decision that

Petitioner Martindale is being punished not for acts of commission, but rather, for acts of

omission. (Petitioners Appeal Pet. at 5.)

I disagree with Petitioners contention that the Chief ALJ based his conclusion that

Petitioner was actively involved in activities resulting in a violation of the PACA solely


25/35

25

In re Lawrence D. Salins, 57 Agric. Dec. 1474, 1489 (1998).10

on Petitioners acts of omission. The Chief ALJ based his conclusion that Petitioner was

actively involved in activities resulting in Garden Fresh Produce, Inc.s violations of the

PACA both on Petitioners acts of commission, as well as, Petitioners acts of omission.

The Chief ALJ found Petitioner issued checks and may have made some purchases for

Garden Fresh Produce, Inc., during the period when Garden Fresh Produce, Inc., violated

the PACA (Initial Decision at 11). The record supports the Chief ALJs finding that

Petitioner issued checks, and I find Petitioner made some purchases on behalf of Garden

Fresh Produce, Inc., during the period when Garden Fresh Produce, Inc., violated the

PACA (Tr. 17-18, 29-30, 33, 52, 55). Check writing and choosing which debts to pay can

cause an individual to be actively involved in the failure of a PACA licensee to make full

payment promptly in accordance with the PACA. Moreover, continuing to make10

purchases during the period when a PACA licensee is violating the prompt payment

provision of the PACA can cause an individual to be actively involved in the failure of a

PACA licensee to make full payment promptly in accordance with the PACA.

As for Petitioners acts of omission, I disagree with the Chief ALJs assertion that

Petitioners acts of omission support the conclusion that Petitioner was actively involved

in activities resulting in Garden Fresh Produce, Inc.s violations of the PACA. The Chief

ALJ, citingIn re Anthony L. Thomas, 59 Agric. Dec. 367, 388 (2000), states [t]he failure

to exercise powers inherent in [Petitioners] various positions with Garden Fresh,


26/35

26

because he chose not to use the powers he had has previously been found a basis for

finding active participation. (Initial Decision at 12.) However, the passage from

Thomas quoted by the Chief ALJ relates to issue of whether an individual was a nominal

officer, director, and shareholder of a violating company, not to the issue of whether the

individual was actively involved in the activities resulting in a violation of the PACA, as

follows:

Even if I accept Petitioners claim that he acted at the direction of

Mr. Giuffrida, that does not negate Petitioners actual, significant nexus toSanford Produce Exchange, Inc. As the Court stated in Veg-Mix, Inc. v.

United States Dept of Agric., 832 F.2d 601, 611 (D.C. Cir. 1987), in

determining whether or not an individual is nominal, the crucial inquiry is

whether an individual has an actual significant nexus with the violating

company, rather than whether the individual has exercised real authority.

Petitioner cannot avoid responsibility for the violations Sanford Produce

Exchange, Inc., committed while he was president, simply because he chose

not to use the powers he had.

In re Anthony L. Thomas, 59 Agric. Dec. 367, 387-88 (2000).

Similarly, the Chief ALJ quotes Bell v. Department of Agriculture, 39 F.3d 1199,

1201 (D.C. Dir. 1994), to support his conclusion that Petitioners inaction constitutes

active involvement in activities resulting in a violation of the PACA (Initial Decision

at 12). Bellmakes clear that the passage quoted by the Chief ALJ relates to the issue of

whether an individual was a nominal officer, director, and shareholder of a violating

company, not to the issue of whether the individual was actively involved in the activities

resulting in a violation of the PACA, as follows:

The second way of rebutting the presumption is for the petitioner to

prove that at the time of the violations he was only a nominalofficer,


27/35

27

director, or shareholder. This he could only establish by proving that he

lacked an actual, significant nexus with the violating company. Minotto,

711 F.2d at 409. Where responsibility was not based on the individuals

personal fault, id. at 408, it would have to be based at least on his failureto counteract or obviate the fault of others, id.

Bell v. Department of Agriculture, 39 F.3d 1199, 1201 (D.C. Cir. 1994) (footnote

omitted).

While I disagree with the Chief ALJs assertion that Petitioners acts of omission

support the conclusion that Petitioner was actively involved in activities resulting in

Garden Fresh Produce, Inc.s violations of the PACA, I do not hold that an act of

omission can never constitute active involvement in the activities resulting in a violation

of the PACA. I only conclude, based on the record before me, that Petitioners acts of

omission do not constitute active involvement in the activities resulting in Garden Fresh

Produce, Inc.s violations of the PACA.

Second, Petitioner contends the Chief ALJ erroneously concluded Petitioner was

not a nominal officer, director, and shareholder of Garden Fresh Produce, Inc., during the

period January 14, 2002, through February 26, 2003, when Garden Fresh Produce, Inc.,

violated the PACA (Petitioners Appeal Pet. at 3-4, 9-12).

I agree with the Chief ALJs conclusion that Petitioner failed to establish by a

preponderance of the evidence that he was only nominally an officer, a director, and a

stockholder of Garden Fresh Produce, Inc. In order for a petitioner to show that he or she

was only nominally an officer, a director, and a stockholder, the petitioner must show by

a preponderance of the evidence that he or she did not have an actual, significant nexus


28/35

28

See note 7.11

See note 8.12

with the violating company during the violation period. Under the actual, significant

nexus standard, responsibilities are placed upon corporate officers, directors, and

stockholders, even though they may not actually have been actively involved in the

activities resulting in violations of the PACA, because their status with the company

requires that they knew, or should have known, about the violations being committed and

they failed to counteract or obviate the fault of others. The record establishes Petitioner11

had an actual, significant nexus with Garden Fresh Produce, Inc., during the violation

period.

During the period when Garden Fresh Produce, Inc., violated the PACA, Petitioner

owned a substantial percentage of the outstanding stock of Garden Fresh Produce, Inc.

Petitioners ownership of a substantial percentage of stock alone is very strong evidence

that he was not a nominal shareholder. Petitioner has not demonstrated by a12

preponderance of the evidence that he was only a nominal shareholder of Garden Fresh

Produce, Inc.

Moreover, Petitioner had the appropriate business experience to be a corporate

officer and director. At the time of the March 2, 2005, hearing, Petitioner had 15 years of

experience in the produce business. Petitioner began working at Martindale Distributing,

a business run by Petitioners father in Salinas, California. Petitioner started in


29/35

29

In re Lawrence D. Salins, 57 Agric. Dec. 1474, 1494 (1998).13

Martindale Distributing as a produce inspector and on grounds buyer. When

Petitioners father retired from the Martindale Distributing in 1999, Petitioner, along with

his stepbrother and brother, purchased the company, with each of them owning one-third

of the company. Since approximately May 2003, when his brother and stepbrother

resigned from Martindale Distributing, Petitioner has been the 100 percent owner of

Martindale Distributing. (Tr. 36-39, 41-42.)

A persons active participation in corporate decision-making is an important factor

in the determination that the person was not merely a nominal corporate officer and

director. In late 1999 or early 2000, Petitioner, along with several others, formed13

Garden Fresh Produce, Inc. (Tr. 42). Petitioner was a 20 percent shareholder of the new

company, a director, and the secretary. Petitioner signed the original PACA license

application and the check in payment of the PACA licensing fee. Petitioner remained a

stockholder, a director, and the secretary until he submitted his resignation and reassigned

his stock in April 2003 (RX 1 at 16, 18, 20).

Petitioner joined Garden Fresh Produce, Inc., because he was good with bills and

money management (Tr. 85). During the early days of Garden Fresh Produce, Inc.s

operations, Petitioner, working from Martindale Distributings Salinas, California, office,

handled much of Garden Fresh Produce, Inc.s paperwork, even receiving a salary for


30/35

30

handling the payables. Petitioner classified his principal duties with Garden Fresh

Produce, Inc., as that of an accounts payable manager. (Tr. 48-50.)

Petitioner purchased produce on behalf of Garden Fresh Produce, Inc., in the first

year it did business, and continued making a small number of purchases in 2002

(Tr. 17-18). Petitioner issued checks after 2001 when he was directed by his brother and

stepbrother to make payment to certain vendors that were in Salinas. (Tr. 52, 95.)

Petitioner took calls for Garden Fresh Produce, Inc., at his Salinas, California, office and

became aware in 2002 that there were complaints about the way Garden Fresh Produce,

Inc., handled accounts payable. Petitioner referred callers to Wayne Martindale to

attempt to resolve Garden Fresh Produce, Inc.s failures to pay (Tr. 52-53). Even though

Petitioner knew Garden Fresh Produce, Inc., had financial problems, he did not ask to see

a financial statement or bank statements, relying on statements from Wayne Martindale

and Donald Beucke that things were getting better. (Tr. 99.)

Before Petitioner resigned from Garden Fresh Produce, Inc., Petitioner signed

documents accepting the resignation of two directors, David N. Wiles and Bruce

Martindale (RX 1 at 13, RX 9, RX 11). At all times material to this proceeding, all the

principals in Garden Fresh Produce, Inc., including Petitioner, had equal authority and

could sign checks and pay payables (Tr. 112). At all times material to this proceeding,

Petitioner was authorized to negotiate contracts, leases, and other arrangements for and on

behalf of Garden Fresh Produce, Inc., and, with the other officers of Garden Fresh

Produce, Inc., had responsibility for the activities of the corporation (RX 8 at 4, 5).


31/35

31

In short, I find Petitioner had an actual, significant nexus with Garden Fresh

Produce, Inc. Petitioner was a major stockholder of Garden Fresh Produce, Inc.;


32/35

32

Petitioner had the appropriate business experience to be a corporate officer and director;

and Petitioner participated in corporate decision-making.

Third, Petitioner contends the Chief ALJ erroneously concluded, because

Petitioner owned 20 percent of the stock in Garden Fresh Produce, Inc., Petitioner had to

make a particularly compelling case in order to establish that he was not responsibly

connected (Petitioners Appeal Pet. at 4, 12-13).

Section 1(b)(9) of the PACA (7 U.S.C. 499a(b)(9)) provides that for the first

alternative of the second prong of the responsibly connected test, a petitioner, who is a

holder of more than 10 percent of the outstanding stock of a company, must demonstrate

by a preponderance of the evidence that he or she was only nominally a shareholder of the

company. Petitioner bases his contention that the Chief ALJ held Petitioner to a higher

standard of proof than preponderance of the evidence on the following statement: [t]he

fact that Congress utilized 10% ownership as sufficient in and of itself to trigger the

presumption regarding responsibly connected is a strong indication that a 20% owner

must make a particularly compelling case to meet the burden of proof. (Initial Decision

at 13.) I do not find that the Chief ALJs reference to a particular compelling case

indicates the Chief ALJ applied the incorrect standard of proof in this proceeding.

The Chief ALJ correctly cites section 1(b)(9) of the PACA (7 U.S.C. 499a(b)(9))

as the statutory provision applicable in this proceeding (Initial Decision at 7). Moreover,

the Chief ALJ explicitly applies the standard of proof in section 1(b)(9) of the PACA

(7 U.S.C. 499a(b)(9)), stating: Even if [Petitioner] was not actively involved in the


33/35

33

violation, Petitioner likewise did not meet his burden of showing, by a preponderance of

the evidence, that he was only a nominal 20% shareholder, director, and secretary.

(Initial Decision at 12.) The Chief ALJ does not apply an alternative standard of proof in

this proceeding. Therefore, I reject Petitioners contention that the Chief ALJ held

Petitioner to a standard of proof higher than preponderance of the evidence to

demonstrate that he was only a nominal 20 percent shareholder of Garden Fresh Produce,

Inc.

Conclusions of Law

1. Petitioner was a 20 percent shareholder, a director, and the secretary of

Garden Fresh Produce, Inc., from its inception in April 2000 until he resigned from

Garden Fresh Produce, Inc., in April 2003.

2. During the period January 14, 2002, through February 26, 2003, Garden

Fresh Produce, Inc., committed willful, flagrant, and repeated violations of section 2(4) of

the PACA (7 U.S.C. 499b(4)) by failing to make full payment promptly of the agreed

purchase prices to five produce sellers for 109 lots of perishable agricultural

commodities, in the total amount of $379,923.25.

3. Petitioner failed to prove by a preponderance of the evidence that he was

not actively involved in the activities resulting in Garden Fresh Produce, Inc.s violations

of section 2(4) of the PACA (7 U.S.C. 499b(4)), during the period January 14, 2002,

through February 26, 2003.


34/35

34


only nominally an officer, a director, and a shareholder of Garden Fresh Produce, Inc.,

during the period January 14, 2002, through February 26, 2003, when Garden Fresh

Produce, Inc., violated section 2(4) of the PACA (7 U.S.C. 499b(4)).


not an owner of Garden Fresh Produce, Inc., during the period January 14, 2002, through

February 26, 2003, when Garden Fresh Produce, Inc., violated section 2(4) of the PACA

(7 U.S.C. 499b(4)).

6. Petitioner was responsibly connected, as that term is defined in section

1(b)(9) of the PACA (7 U.S.C. 499a(b)(9)), with Garden Fresh Produce, Inc., during the

period January 14, 2002, through February 26, 2003, when Garden Fresh Produce, Inc.,

violated section 2(4) of the PACA (7 U.S.C. 499b(4)).

For the foregoing reasons, the following Order should be issued.

ORDER

I affirm Respondents May 10, 2004, determination that Petitioner was responsibly

connected with Garden Fresh Produce, Inc., when Garden Fresh Produce, Inc., violated

section 2(4) of the PACA (7 U.S.C. 499b(4)). Accordingly, Petitioner is subject to the

licensing restrictions under section 4(b) of the PACA and the employment restrictions

under section 8(b) of the PACA (7 U.S.C. 499d(b), 499h(b)), effective 60 days after

service of this Order on Petitioner.

RIGHT TO JUDICIAL REVIEW


35/35

35

14

Petitioner has the right to seek judicial review of the Order in this Decision and

Order in the appropriate United States Court of Appeals in accordance with 28 U.S.C.

2341-2350. Petitioner must seek judicial review within 60 days after entry of the Order in

this Decision and Order. The date of entry of the Order in this Decision and Order is14

July 26, 2006.

Done at Washington, DC

July 26, 2006

______________________________

William G. Jenson

Judicial Officer

Agriculture Law: martindale

Documents

Transcript of Agriculture Law: martindale